example 2 Future Value of an Annuity

Chapter 5.6

Harry deposits $200 at the end of each month into an account that pays interest 12%per year, compounded monthly. Find the future value for every 4-month period, for upto 36 months.

2009 PBLPathways

2009 PBLPathways

Harry deposits $200 at the end of each month into an account that pays interest 12%per year, compounded monthly. Find the future value for every 4-month period, for upto 36 months.

2009 PBLPathways

Harry deposits $200 at the end of each month into an account that pays interest 12%per year, compounded monthly. Find the future value for every 4-month period, for upto 36 months.

Future Value of an Ordinary Annuity

If R dollars are contributed at the end of each period for n periods into an annuity that pays interest at rate i at the end of the period, the future value of the annuity is 1 1

dollarsn

iS R

i

12%0.01

12200

i

R

1.01 1200 dollars

0.01

n

S

2009 PBLPathways

Harry deposits $200 at the end of each month into an account that pays interest 12%per year, compounded monthly. Find the future value for every 4-month period, for upto 36 months.

Future Value of an Ordinary Annuity

If R dollars are contributed at the end of each period for n periods into an annuity that pays interest at rate i at the end of the period, the future value of the annuity is 1 1

dollarsn

iS R

i

12%0.01

12200

i

R

1.01 1200 dollars

0.01

n

S

2009 PBLPathways

Harry deposits $200 at the end of each month into an account that pays interest 12%per year, compounded monthly. Find the future value for every 4-month period, for upto 36 months.

Future Value of an Ordinary Annuity

If R dollars are contributed at the end of each period for n periods into an annuity that pays interest at rate i at the end of the period, the future value of the annuity is 1 1

dollarsn

iS R

i

12%0.01

12200

i

R

1.01 1200 dollars

0.01

n

S

2009 PBLPathways

Harry deposits $200 at the end of each month into an account that pays interest 12%per year, compounded monthly. Find the future value for every 4-month period, for upto 36 months.

Future Value of an Ordinary Annuity

If R dollars are contributed at the end of each period for n periods into an annuity that pays interest at rate i at the end of the period, the future value of the annuity is 1 1

dollarsn

iS R

i

12%0.01

12200

i

R

1.01 1200 dollars

0.01

n

S

2009 PBLPathways

Harry deposits $200 at the end of each month into an account that pays interest 12%per year, compounded monthly. Find the future value for every 4-month period, for upto 36 months.

Future Value of an Ordinary Annuity

If R dollars are contributed at the end of each period for n periods into an annuity that pays interest at rate i at the end of the period, the future value of the annuity is 1 1

dollarsn

iS R

i

12%0.01

12200

i

R

1.01 1200 dollars

0.01

n

S

2009 PBLPathways

n

4 812.08

8 1657.13

12 2536.50

16 3451.57

20 4403.80

24 5394.69

28 6425.82

32 7498.81

36 8615.38

Harry deposits $200 at the end of each month into an account that pays interest 12%per year, compounded monthly. Find the future value for every 4-month period, for upto 36 months.

1.01 1200 dollars

0.01

n

2009 PBLPathways

n

4 812.08

8 1657.13

12 2536.50

16 3451.57

20 4403.80

24 5394.69

28 6425.82

32 7498.81

36 8615.38

Harry deposits $200 at the end of each month into an account that pays interest 12%per year, compounded monthly. Find the future value for every 4-month period, for upto 36 months.

1.01 1200 dollars

0.01

n

41.01 1200 812.08

0.01

2009 PBLPathways

n

4 812.08

8 1657.13

12 2536.50

16 3451.57

20 4403.80

24 5394.69

28 6425.82

32 7498.81

36 8615.38

Harry deposits $200 at the end of each month into an account that pays interest 12%per year, compounded monthly. Find the future value for every 4-month period, for upto 36 months.

1.01 1200 dollars

0.01

n

2009 PBLPathways

n

4 812.08

8 1657.13

12 2536.50

16 3451.57

20 4403.80

24 5394.69

28 6425.82

32 7498.81

36 8615.38

Harry deposits $200 at the end of each month into an account that pays interest 12%per year, compounded monthly. Find the future value for every 4-month period, for upto 36 months.

1.01 1200 dollars

0.01

n

81.01 1200 1657.13

0.01

2009 PBLPathways

n

4 812.08

8 1657.13

12 2536.50

16 3451.57

20 4403.80

24 5394.69

28 6425.82

32 7498.81

36 8615.38

Harry deposits $200 at the end of each month into an account that pays interest 12%per year, compounded monthly. Find the future value for every 4-month period, for upto 36 months.

1.01 1200 dollars

0.01

n

2009 PBLPathways

n

4 812.08

8 1657.13

12 2536.50

16 3451.57

20 4403.80

24 5394.69

28 6425.82

32 7498.81

36 8615.38

Harry deposits $200 at the end of each month into an account that pays interest 12%per year, compounded monthly. Find the future value for every 4-month period, for upto 36 months.

1.01 1200 dollars

0.01

n

2009 PBLPathways

n

4 812.08

8 1657.13

12 2536.50

16 3451.57

20 4403.80

24 5394.69

28 6425.82

32 7498.81

36 8615.38

Harry deposits $200 at the end of each month into an account that pays interest 12%per year, compounded monthly. Find the future value for every 4-month period, for upto 36 months.

1.01 1200 dollars

0.01

n

n

S